• Aug 20 / 2015
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Council Spending £1.2m on Business Rates

Recent figures have emerged to show that Swindon Council is spending around £1.2m on business rates. Overall, the total value of the rateable properties in Swindon comes to £17.5m.

The majority of unused properties are owned by private operators. However, Swindon Council itself owns a number of properties with substantial rateable values of six-figure sums.

At a time when councils are facing a number of cuts, saving as much money as possible will be a high priority. Business rates are a significant financial burden that should be dealt with as soon as possible.

Business rates and regeneration

The recent Government budget, though based on our recovering economy, will pose serious challenges to councils and individual shops. Indeed in Swindon, many of the council-owned vacant properties are shops that have recently closed down in the town centre.

One property in particular, the Liquor Lounge unit, will incur £70,000 worth of charges if it stays empty for the next 15 months.

Numerous politicians have advised that regeneration is the best way to counter the issues of empty premises. According to Harry Phibbs at Conservative Home, pubs, corner shops and the local high street are crucial for a thriving community, so it’s disappointing that few councils have tried to save them with business rates reoccupation relief.

With the business rates reoccupation relief scheme, businesses can claim a 50% discount for moving into a property that was empty. Utilising a budget of £100,000, Rochdale Council plans to encourage new investment, jobs, business startups and entrepreneurship through the local government scheme.

Enhancing business rates relief

Encouraging new businesses to take on vacant property as their future home is a great way for councils to reduce the costs of business rates. However, while waiting for the empty building to find a new owner, other measures can be taken to reduce the cost of business rates.

Newly vacant property has a 3 month period of relief from business rates but after that time has elapsed, business rates must be paid by the owner of the property. With vacant property specialists, vacant property owners can witness a 90% cost reduction in business rates.

Vacant property security and management firms such as Oaksure can significantly reduce business rates liability. They recruit, organise and manage live-in guards who protect a property by occupying it. If it is done correctly and within the existing regulation this can result in as much as 90% tax savings. There is the additional benefit with this system that a building is used to provide temporary accommodation rather than languishing empty.

Working with councils such as Swindon, vacant property specialists and SIA trained property guardians could save help councils huge amounts of money that could be going to better use within the community.

  • Aug 10 / 2015
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Landmark Ruling Quashes Vacant Building Credit

Not too long ago, we wrote on the topic of Vacant Building Credit (VBC) and how Oaksure Property Protection could help developers of brownfield sites enjoy even greater savings.

Introduced in November 2014 by the housing minister Brandon Lewis, Vacant Building Credit had a relatively small reaction. Now, evidence has emerged to suggest that the planning policy has had a negative effect on local authorities. The London Borough of Westminster, for example, lost £29m, a not insignificant amount that could have gone towards much-needed affordable housing.

The planning policy has now been quashed through a High Court Ruling.

Vacant Building Credit

The Vacant Building Credit was unveiled as an incentive for developers to make use of the huge amount of brownfield sites in the UK. Aiding the potential for the regeneration of derelict areas, VBC allowed developers to reduce their mandatory affordable housing contributions to local authorities. The reductions were based on the extent of their brownfield site redevelopment.

However, as John Walker, director of planning at the City of Westminster, told the Guardian: there will be some sites where local authorities get nothing.

Although the policy was devised to promote house reconstruction and bring empty buildings back into use, the British Labour Party politician Tessa Jowell believed it threatened to help developers avoid providing affordable housing. This would be both disappointing and problematic for places like London where affordable housing is most needed.

The future of vacant building redevelopment

We may not have seen the definitive end of the spirit of VBC. As The Department for Communities and Local Government have said, Britain is building again. With increasing removal of red-tape and extra costs, they hope they can keep the momentum.

Companies who manage money for residential investors like JR Capital don’t believe the credit’s removal will deter investors from investing in the capital.

Furthermore, the government has recently announced plans to launch two initiatives that will boost house building on brownfield sites with £36m. £26m will be provided for developers building properties for first-time buyers. At the same time, £10m will be made available for local authorities that prepare brownfield sites for starter homes development.

Architects, developers, councils, housing associations and small builders will all be supported as the government starts to fulfil its pledge to build 200,000 starter homes by 2020.